Cheniere Signs 20-Year LNG Sale and Purchase Agreement with Iberdrola

Cheniere Energy announced today that its subsidiary, Corpus Christi Liquefaction has entered into a 20-year sale and purchase agreement (SPA) for approximately 0.4 million tonnes per annum (mtpa) of liquefied natural gas (LNG) to Spanish energy firm Iberdrola, S.A. The company notes volumes will increase to 0.8 mtpa when Train 2 is brought on line in 2019. The SPA includes a 10-year extension option.

While plans for the proposed Corpus Christi Liquefaction facility and terminal is still under review by the Federal Energy Regulatory Commission, construction is planned to begin at some point in the next 18 months assuming approvals are given, with facility start-up in 2018. The facility is being designed with three LNG trains with an aggregate production capacity of 13.5 mtpa of LNG.

Under the SPA, Iberdrola will purchase LNG on a free on board (“FOB”) basis for a purchase price indexed to the monthly Henry Hub price plus a fixed component. LNG will be loaded onto Iberdrola’s vessels.

“Iberdrola is the first foundation customer on Train 2 of our Corpus Christi Liquefaction Project being developed in Texas. Iberdrola is a leading European power generation and distribution company with operations located in several countries around the Atlantic Basin,” said Charif Souki, Chairman and CEO. “To date we have entered into SPAs aggregating approximately 3.8 mtpa of LNG volumes. We are in advanced discussions with other counterparties and are working towards finalizing additional agreements. We expect to complete all necessary steps to reach a final investment decision and begin construction by early 2015.”

In April, Cheniere signed a 20-year SPA with Endesea for 1.5 mtpa and a 0.8 mtpa SPA with Pertamina in December 2013.